The change conundrum

Not-for-profits are realising the need to put the customer at the heart of their service, in response to the recent health, disability and aged care reforms. Tied to this customer centricity is a new language with terms floating around including person centred care or consumer directed care.

Focusing on the customer is something corporates have learnt early in their organisation’s life. More than just marketing theory, they have experienced firsthand the results of being out of tune with customers. Being unaware of customer needs typically affects corporates in many ways. Purchasing of products and services (quantity, frequency, pricing) is the obvious impact. What about the frustrated customer who contacts the CEO – or, feeling disempowered, talks to the press or takes control of the situation by jumping on Facebook with an image of the dodgy product or a story of the customer service dramas? Or the abused call centre staff who go on strike? Or the general public who boycott the firm after the news spreads? Or the shareholders at the AGM who demand the management issues are addressed?

The importance of customer is a more recent reality, though, for not-for-profits, many who were separated or at least sheltered from the customer by Government funding, loyal supporters, lack of competition, internal bureaucracies, poor customer data and limited customer access. The recent Government reforms, combined with changing public sentiment, are encouraging a focus on the customer and nowadays transparency, person centred care, funding cuts and mergers are the water cooler topics at many not-for-profits. Those charities who are embracing these trends are emerging from the pack, gaining funding, being recognised with awards, recruiting high calibre leaders, receiving media attention and, most importantly, making big wins for their customers.

After an uncertain start, the ACNC has made some headway, consulted widely with the sector, released some important reports and clarified its role. These measures, combined with several surveys of stakeholders by independent groups, have resulted in a desire by the sector for the ACNC to continue and, at least for now, no indication of the ACNC’s demise.

In addition to the ACNC improving the transparency of the not-for-profit sector and starting to carry out the watch dog part of its role with a number of charities recently losing their charitable status, there are other tools and trends helping to build transparency and accountability in the sector, including new, user friendly and low cost technologies along with the tendency for charities to make their communications simpler and more engaging, examples being the growth of infographics, videos, social media activities and co-curated content.

Some experts argue that the not-for-profit sector is cumbersome and wasteful, that Government funding has been withdrawn before the sector has adjusted, that it is taking too long to evolve to a customer centric approach, that service users are being caught in the crossfire (or stuck in the quagmire of inaction) and that new models are needed. One such model is a new breed of organisation, sometimes called a ‘for purpose’ entity, that combines elements of the ‘for profit’, customer centric corporate along with elements of the well intentioned not-for-profit who cares for the vulnerable. Following the recent development of social bonds, we’re seeing an emergence of social ventures, often nimble for purpose start ups filling a market gap by providing a sustainable venture that has a social ethos at its heart.

The charity sector has developed over the last 200+ years in Australia out of a desire for social justice, a desire which is as strong today as ever. The not-for-profit descriptor has a literal meaning which does not represent the true intent and perhaps a term such as social venture is more descriptive and accurate – terminology alone, though, is not sufficient in building customer centricity.

Sadly there will be losers in the sector when some charities downsize, merge or cease operations. Whether there are changes in the organisation descriptor, business model, organisation design and resourcing, funding methods, regulatory bodies, communication approaches or other factors, at the end of the day the emerging customer focus can only be seen as a good thing and we will watch this space with interest.

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